Children with phonological impairment present with pattern-based errors in their speech production. While some children have difficulties with speech perception and/or the establishment of robust underlying phonological representations, the nature of phonological impairment in children is still not well understood. Given that phonological and lexical development are closely linked, one way to better understand the nature of the problem in phonological impairment is to examine word learning abilities in children. To examine word learning and its relationship with speech perception, speech production and vocabulary knowledge in children aged 4-5 years. There were two variables of interest: speech production abilities ranging from phonological impairment to typical speech; and vocabulary abilities ranging from typical to above average ('lexically precocious'). Participants were 49 Australian-English-speaking children aged 48-69 months. Children were each taught four novel non-words (out of a selection of eight) through stories, and word learning was assessed at 1 week post-initial exposure. Word learning was assessed using two measures: confrontation naming and story retell naming. Data were analysed by group using independent-samples t-tests and Mann-Whitney U-tests, and continuously using multiple linear regression. There was no significant difference in word learning ability of children with and without phonological impairment, but regardless of speech group, children with above average vocabulary had significantly better word learning abilities than children with average vocabulary. In multiple linear regression, vocabulary was the only significant predictor of variance in word learning ability. Children with phonological impairment can be lexically precocious and learn new words like their peers without phonological impairment. Contrary to expectations, vocabulary knowledge rather than expressive phonological ability explained variance in measures of word learning. These findings question an assumption that children with phonological impairment have underspecified phonological representations. They also highlight the heterogeneity among children with phonological impairment and the need to better understand the nature of their difficulty learning the phonological system of the ambient language. What is already known on the subject There is limited research examining the word learning abilities of children with phonological impairment. Most previous research focuses on word properties such as phonotactic probability and neighbourhood density. Within the existing literature there are different reports and conclusions regarding the word learning abilities of children with phonological impairment and whether their word learning differs from that of children with typically developing speech. What this study adds to existing knowledge This study found that vocabulary was the strongest predictor of word learning across children with and without phonological impairment. There was no significant difference in word learning ability between children with and without phonological impairment. However, children with lexically precocious vocabulary abilities were significantly better at word learning than children with average vocabulary abilities. What are the potential or actual clinical implications of this work? Findings from this study support the importance of assessing and considering measures of word learning-including vocabulary-when working with children with phonological impairment. This study indicates that it is possible to use stories coupled with measures of confrontation naming and story retell to gain deeper insight into children's word learning abilities.